New Delhi: In what could prove a further embarrassment for the government, already under attack over allegations of corruption, a panel appointed by it has questioned the role of one of the administration’s top lawyers in allowing changes that meant the state-run broadcaster making payments earlier than originally agreed.
According to the report by the panel appointed by Prime Minister Manmohan Singh and headed by former comptroller and auditor general of India V.K. Shunglu, inappropriate changes were made in terms and conditions of a Rs 246 crore deal between state-run broadcaster Prasar Bharati and UK company SIS Live, which had won the host broadcaster contract for coverage of the Commonwealth Games in October.
Mint reviewed a copy of the Shunglu committee report, which cites the law minister referring to solicitor general (SG) Gopal Subramaniam’s role and states that “after going through the legal opinion on the contract document, it appears that the SG has tried more to arrive at a compromise between the two parties and has not specifically given a finding on legality of the same”.
Responding to Mint’s queries on the allegations against him in the Shunglu report, Subramaniam said he sought a compromise as the broadcast of the event that was meant to showcase India may have otherwise been jeopardized.
“Out of my deep concern, I was only trying to help both the parties to find a sensible understanding with each other,” he said. “It reached a point where the broadcaster would have slipped away and the Indian state would have cut a sorry figure.”
“Prasar Bharati was in no position to re-tender the contract and that would have become a great embarrassment for them,” Subramaniam said. “I have spent hours on this matter without charging a fee only because of the larger interest of the nation.”
In the contract signed between Prasar Bharati and SIS Live, 30% of the value of the contract was to be released before the completion of the event. This was revised to 60%. The Shunglu committee report said the revision of the contract was proposed by the Doordarshan director general (DG), based on the solicitor general’s recommendations.
The Doordarshan DG “proposed release of 60% payment (against 20% payment already made) to SIS on the basis of recommendations of solicitor general”, the report said. “In a meeting in August 2010, the DD (Doordarshan) DG said that SIS Live had threatened to terminate the contract unless change in payment schedule was made.”
The Shunglu committee said that the waiver of performance and bank guarantees was inappropriate. According to the contract, SIS Live was supposed to submit an acceptance letter along with a performance guarantee amounting to 10% of the contract value on 6 November 2009, but it only gave the guarantee in March 2010.
The reports further states that “the legal reference can be viewed as attempts to foreclose the options of financial and management scrutiny on merit of the issues in terms of the contract and instead use the legal advice to cover or justify the management, financial and ethical misdemeanour”.
While commenting on this decision, the report said: “This, besides violating the sanctity of contractual obligation, resulted in undue financial benefit to SIS Live.”
Prasar Bharti obtained legal advice in connection with the contract from “legal luminaries...ranging from the solicitor general...even when the issues concerned related more to management decisions rather than legal complexities”, the report said.
A legal note given to Prasar Bharati by the solicitor general on the issue of bank guarantees, also reviewed by Mint, said, “Considering the fact that the entity has acted in good faith, mobilized personnel and shown great enthusiasm, the dispensation may be considered by the competent authority.”
Although the solicitor general recorded the point raised by Prasar Bharti’s member finance A.K. Jain that the request for proposal was sacrosanct and that any deviation had to be accepted by the competent authority, he said that “given the uniqueness of the Games and the quality of work expected by the HB (host broadcaster), I felt that the above changes could be considered by the competent authority in its wisdom and public interest considerations”.
Subramaniam ended his note by stating, “I have spent 23 hours on the above only with a view to bring parties together in a sensible understanding. I have no pecuniary or professional interest at all in this matter.”
The Shunglu committee report submitted to the Prime Minister on 29 January has been sent to cabinet secretary K.M. Chandrashekhar for examination.
The Shunglu committee, while recommending action against B.S. Lalli, the then Prasar Bharati chief executive officer, and Aruna Sharma, director general of Doordarshan, noted that “others who acted in concert” with the duo for providing undue gain to SIS Live should also be punished.
A senior Prasar Bharati official, who spoke to Mint on condition of anonymity, said, “It is unfortunate, but if the Shunglu committee report is challenged, the case will get legal immunity as all the decisions were cleared by the oversight committee headed by the information and broadcasting minister and the law ministry.”
Mint was informed by Shunglu’s office that he was not available for comment.